KEY INFORMATION MEMORANDUM (Offer of Units at available NAV Based Price)

Transcription

1 IDFC Asset Management Company Limited I IDFC Mutual Fund KE INFORMATION MEMORANDUM (Offer of Units at available NAV Based rice) This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For further details of the scheme/mutual Fund, due diligence certificate by the AMC, Key ersonnel, investors rights & services, risk factors, penalties & pending litigations etc. investors should, before investment, refer to the Scheme Information Document and Statement of Additional Information available free of cost at any of the Investors Service Centres or distributors or from website The Scheme particulars have also been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations 1996, as amended till date, and filed with the Securities and Exchange Board of India (SEBI). The units being offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM. Dated: June 30, 2017 NAME OF SCHEME IDFC remier Equity Fund (IDFC-EF) THIS RODUCT IS SUITABLE FOR INVESTORS WHO ARE SEEKING* RISKOMETER Create wealth over a long period of time Investment predominantly in equity and equity related instruments across market capitalisation IDFC Classic Equity Fund (IDFC-CEF) Create wealth over a long period of time Investment predominantly in equity and equity related instruments across market capitalisation IDFC Focused Equity Fund (IDFC-FEF) Create wealth over a long period of time. (Earlier known as IDFC Imperial Equity Fund) Investment in a concentrated portfolio of Equity and Equity related instruments of up to 30 companies. IDFC Nifty Fund (IDFC-NF) Create wealth over a long period of time Replicate the Nifty 50 Index by investing in securities of the Nifty 50 Index in the same proportion/weightage. IDFC Tax Advantage (ELSS) Fund (IDFC-TA(ELSS) F) IDFC Sterling Equity Fund (IDFC-SEF) Create wealth over a long period of time Investment predominantly in Equity and Equity related securities Create wealth over a long period of time Investment predominantly in equity and equity related instruments in the mid cap segment IDFC Equity Fund (IDFC-EF) Create wealth over a long period of time Investment predominantly in equity and equity related instruments in the large cap segment. IDFC Monthly Income lan (IDFC-MI) Capital appreciation and provide regular income over a long period of time Investment primarily in debt securities to generate regular returns and investment of a portion of the Scheme's assets in equity securities to generate long-term capital appreciation IDFC Asset Allocation Fund of Funds - Aggressive lan (IDFC-AAFF-A) Investors understand that their principal will be at moderately high risk Capital appreciation and provide regular income over a long period of time Investment in different mutual fund schemes primarily local funds based on a defined asset allocation model IDFC Asset Allocation Fund of Funds - Moderate lan (IDFC-AAFF-M) Capital appreciation and provide regular income over a long period of time Investment in different mutual fund schemes primarily local funds based on a defined asset allocation model IDFC Dynamic Equity Fund (IDFC-DEF) Create wealth over a long period of time. Dynamic allocation towards equity, derivatives, debt & Money market Instruments. IDFC Balanced Fund (IDFC-BF) To create wealth over a long period of time. Capital appreciation and current income by investing in equity as well as fixed income securities. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

2 NAME OF SCHEME IDFC Arbitrage Fund (IDFC-AF) THIS RODUCT IS SUITABLE FOR INVESTORS WHO ARE SEEKING* RISKOMETER To generate low volatility returns over short to medium term Investments predominantly in arbitrage opportunities in the cash and derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. IDFC Money Manager Fund Investment lan (IDFC-MMF-I) IDFC Super Saver Income Fund - Short Term lan (IDFC-SSIF-ST) To generate short term stable returns with a low risk strategy Investments in good quality fixed income & Money Market securities To generate optimal returns over short to medium term Investments in good quality fixed income & Money Market securities IDFC Money Manager Fund - Treasury lan (IDFC-MMF-T) To generate short term stable returns with a low risk strategy Investments in good quality debt and money market instruments such that the fund will offer a blend of liquidity with stability of returns. IDFC Ultra Short Term Fund (IDFC-USTF) To generate short term stable returns with a low risk strategy Investments in good quality debt and money market instruments such that the fund will offer a blend of liquidity with stability of returns. IDFC All Seasons Bond Fund (IDFC-ASBF) To generate short term optimal returns with high liquidity Investment predominantly in debt oriented mutual fund schemes and Money Market instruments IDFC Banking & SU Debt Fund (IDFC-BDF) (Earlier known as IDFC Banking Debt Fund) Income over short to medium term. A debt fund that invest predominantly debt and money market instrument issued by SU, Bank and FI. IDFC Super Saver Income Fund - Investment lan (IDFC-SSIF-I) To generate long term optimal returns by active management Investments in high quality money market & debt instruments including G-Sec securities IDFC Super Saver Income Fund - Medium Term lan (IDFC-SSIF-MT) To generate optimal returns over short to medium term Investments in high quality money market & debt instruments including G-Sec securities Investors understand that their principal will be at moderately low risk IDFC Dynamic Bond Fund (IDFC-DBF) To generate long term optimal returns by active management Investments in high quality money market & debt instruments including G-Sec securities IDFC Government Securities Fund - Investment lan (IDFC-GSF-I) To generate long term optimal returns Investments in Government Securities and Treasury Bills IDFC Government Securities Fund - Short Term lan (IDFC-GSF-ST) To generate short to medium term optimal returns Investments in Government Securities and Treasury Bills IDFC Government Securities Fund - rovident Fund lan (IDFC-GSF-F) To generate optimal returns over short to medium term Investments in Government Securities and Treasury Bills IDFC Asset Allocation Fund of Funds Conservative lan (IDFC-AAFF-C) Capital appreciation and provide regular income over a longperiod of time Investment in different mutual fund schemes primarily local funds based on a defined asset allocation model IDFC Arbitrage lus Fund (IDFC-AF) To generate low volatility returns over short to medium term Investments predominantly in arbitrage opportunities in the cash and derivative segments of the equity markets and the arbitrage opportunities available within the derivative segment and by investing the balance in debt and money market instruments. IDFC Corporate Bond Fund (IDFC-CBF) To generate long term optimal returns by active management. Investment in corporate bonds & money market instruments. IDFC Credit Opportunities Fund (IDFC-COF) To generate optimal returns over medium term To predominantly invest in a portfolio of corporate debt securities across the credit spectrum IDFC Infrastructure Fund (IDFC-IF) Investors understand that their principal will be at moderate risk Create wealth over a long period of time Investment predominantly in equity and equity related instruments of companies that are participating in and benefitting from growth in Indian infrastructure and infrastructural related activities Investors understand that their principal will be at high risk IDFC Cash Fund (IDFC-CF) To generate short term optimal returns with High liquidity Investments in high quality money market and debt Instruments Investors understand that their principal will be at low risk *Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

3 IDFC remier Equity Fund (IDFC-EF) (An open ended equity scheme) Investment Objective To seek to generate long-term capital growth from an actively managed portfolio of predominantly equity and equity related instruments. The Scheme portfolio would acquire, inter alia, small and medium size businesses with good long term potential, which are available at cheap valuations. Such securities would be identified through disciplined fundamental research keeping in view medium to long term trends in the business environment. The Scheme shall endeavor to accumulate long-term investor wealth by opening subscriptions to units during periods when stocks are available at reasonable valuations. By doing so, the fund managers would endeavour to prevent short-term money from flowing into the fund which can prove detrimental to the interests of long-term investors. As the Scheme would be sold to investors with a long-term investment horizon, it is also expected that the portfolio would remain relatively more insulated to day to day redemption pressures. The Scheme will close subscription, once it has collected a predetermined manageable corpus (approximate amount), which will be decided by the fund manager of the Scheme depending on the available investment opportunities in the stock market / if the fund manager is of the opinion that investment opportunities have diminished. Thus the fund manager will endeavour to ensure that there are sufficient assets available to meet the long-term objectives of the Scheme. Asset Allocation attern Asset Class Range of allocation (% of Net Assets) Risk rofile of the scheme Equities & Equity related instruments Medium to High Debt & Money Market instruments 0-35 Low to Medium Securitised Debt instruments 0-35 Low to Medium Investments in Derivatives - upto 50% of the net assets of the Scheme. Investments in Securities Lending - upto 35% of the net assets of the Scheme. Investments in Foreign debt instruments - up to 35% of the net assets of the Scheme. Investments in ADRs and GDRs issued by Companies in India / equity of listed overseas companies as permitted by SEBI regulations - upto 50% of the net assets of the scheme. Gross Exposure to Repo of Corporate Debt Securities upto 10% of the net assets of the Scheme Investment Strategy Equity : The scheme will endeavor to invest in well managed sustainable businesses whose shares are available at reasonable value through a process of disciplined research. The portfolio will aim to provide part ownership to investors in some of the best run companies in India. The portfolio of securities will be well diversified across sectors, so identified, to mitigate overall risk. As the scheme is expected to be part of the core long-term equity holdings of the investors, we will adopt a well-balanced and prudent style of fund management that will endeavor to deliver good returns at controlled levels of risk. The guiding principles while managing the portfolio are summarized below: 1) Stock prices are directly correlated to company profits over the medium to long term : Fund management would focus primarily on business fundamentals of the underlying company. The Equity Research process will endeavor to acquire a robust understanding of the dynamics of the underlying business. This would form the basis for forecasts on future profitability and sustainability of cash profit growth. Stock prices of companies that can sustain periods of high cash profit growth will outperform the markets over the long term. Investors entering this scheme are therefore expected to have at least a 2-3 year time horizon. 2) Margin of Safety : The fund managers will look to build a margin of safety while making forecasts on business profitability. Margin of safety will also be the guiding principle while evaluating a company s current market price. The portfolio would also be protected from company specific risks by constantly monitoring the economic and business environment and changes in management strategy. 3) Acquire stocks only at reasonable value : Once good businesses are identified, stocks would be acquired when they are available at a reasonable value. Overall market corrections and stock price falls due to temporary factors that don t affect longterm profitability are an excellent opportunity to buy stocks cheap. 4) Stay fully invested over most periods : The Fund will not try to profit by predicting overall market direction based on technical indicators or momentum. The Fund will generally stay fully invested in equities to give investors the full advantage of a rise in the markets that is inevitable given the current trajectory India s GD growth. The scheme may however hold cash during periods where in the view of the fund manager the market valuations have run ahead of its fundamentals or when fund manager is unable to identify stocks at a reasonable value. The scheme may also hold cash to meet anticipated redemptions or to tide over temporary adverse market developments. Debt : The domestic debt markets are maturing rapidly with liquidity emerging in various debt segments through the introduction of new instruments and investors. The actual percentage of investment in various fixed income securities will be decided after considering the prevailing political conditions, the economic environment (including interest rates and inflation), the performance of the corporate sector and general liquidity and other considerations in the economy and markets. The Fund has put in place detailed Investment Discretion Guidelines defining the prudential and concentration limits for the portfolio limits. The investment management team is allowed full discretion to make sale and purchase decisions within the limits established. The Fund Manager records justification for investment made on the deal slip. Risk rofile of the Scheme Mutual Fund Units involve investment risks including the possible loss of principal. lease read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized on page no. 51 Risk Mitigation Factors lease Refer age No. 52 lans / Option lan Options & sub options available Default option under the plan Default dividend option Regular/ Direct* Growth and Dividend (ayout, Reinvestment & Sweep) Growth Reinvestment *Direct lans: Direct lan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor Folios ; AUM - Rs. 5, Cr. No. of Folios and AUM (As on May 31, 2017) Applicable NAV lease Refer age No. 53 Minimum Application Fresh urchase (Including Switch-in) Additional urchase (Including Switch-in) Repurchase (Including Switch-out) Amount/ Number of Units Rs. 10,000 and any amount thereafter Rs. 1,000 and any amount thereafter Rs. 500 and any amount thereafter If the balance in the folio / account available for redemption is less than the minimum amount prescribed above, the entire balance available for redemption will be redeemed. SI - Rs. 2,000 and in multiples of Rs. 1 thereafter (minimum 6 installments); SW - Rs. 500 and in multiples of Re. 1 thereafter; ST (in) - Rs. 2,000 and any amount thereafter. Despatch of Repurchase Within 10 working days of the receipt of the redemption request at the authorised centre of IDFC Mutual Fund. (Redemption) Request Benchmark Index S& BSE 500 Index Dividend olicy Under Dividend Option, dividend will be declared subject to availability of distributable surplus and at discretion of AMC / Trustee. The undistributed portion of the income will remain in the Option and be reflected in the NAV, on an ongoing basis. The Trustee s decision with regard to availability and adequacy, rate, timing and frequency of distribution of dividend shall be final. Name of the Anoop Bhaskar (managing the fund since April 30, 2016) Fund Manager IDFC AMC Trustee Company Limited Name of the Trustee Company erformance of the Return (%) of Growth Option as at May 31, 2017 ear wise Absolute Returns scheme eriod Direct lan Regular lan Returns 1 ear 3 ears 5 ears Since Inception* S& BSE Returns S& BSE *Date of Inception : Direct lan : 1-Jan-13 Regular lan : 28-Sep-05 Returns more than 1 year are calculated on compounded annualised basis F F F IDFC remier Equity Fund - Dir - Growth S& BSE 500 F F IDFC remier Equity Fund - Reg - Growth

4 IDFC remier Equity Fund (IDFC-EF) (Contd.) (An open ended equity scheme) Expenses of the Scheme (i) Load Structure: Exit Load: 1% if redeemed on or before 365 days from the date of allotment (ii) Actual expenses for the previous financial year (inclusive of Service Tax and Additional TER, if any): Regular lan %; Direct lan %. Waiver of Load for Direct ursuant to SEBI circular no. SEBI/IMD/CIR No.4/ / 09 dated June 30, 2009, there is no entry load for Mutual Fund Applications schemes. Hence, the procedure for waiver of load for Direct Applications is no longer applicable. Tax treatment for the Investors are advised to refer to the details in the Statement of Additional Information (SAI) and also independently refer to Investors (Unitholders) their tax advisor. Daily Net Asset Value The NAV of the Fund will be calculated on all Business Days. The NAV will be published in 2 daily newspapers having (NAV) nationwide circulation and will also be updated on the AMFI website i.e. by 9.00.M. on all business days. The NAV can also be viewed on the website of the Mutual Fund i.e. For Investor Grievances lease Refer age No. 53 please contact Unitholders Information lease Refer age No. 54 ortfolio Turnover Ratio 0.36 [for the period June 1, ortfolio Turnover Ratio is calculated as lower of purchase or sale during the period / Average AUM for the last one year (includes 2016 to May 31, 2017] Fixed Income securities and Equity derivatives). Scheme s ortfolio holdings Top 10 holdings of the Scheme as on May 31, 2017 is stated here below: Company Industry JM Financial Limited Finance Voltas Limited Construction roject VA Tech Wabag Limited Engineering Services Container Corporation of India Limited Transportation Maruti Suzuki India Limited Auto AL Apollo Tubes Limited Ferrous Metals Asian aints Limited Consumer Non Durables Gujarat State etronet Limited Gas HDFC Bank Limited Banks FAG Bearings India Limited Industrial roducts (%) NAV Monthly portfolio statement of the Scheme is hosted on website Exposure of the Scheme across various sectors (% of NAV) : 20.1% 13.9% 11.8% 9.2% 7.6% IDFC Classic Equity Fund (IDFC-CEF) 1.6% Media & Entertainment 2.3% Cement & Cement roducts 3.2% Metals 4.1% Chemicals 4.4% Textiles 4.4% Energy 5.1% harma Construction Automobile Industrial Manufacturing Consumer Goods Services Financial Services 5.3% (An open ended equity scheme) Investment Objective To seek to generate long term capital growth from a diversified portfolio of predominantly equity and equity related instruments. Asset Allocation attern of the scheme Asset Class Equities & Equity related instruments Range of allocation (% of Net Assets) Risk rofile Medium to High Debt & Money Market instruments 0-35 Low to Medium Securitised debt instruments 0-35 Low to Medium Investments in Derivatives - upto 50% of net assets of the scheme. Investments in Securities Lending - upto 35% of the net assets of the Scheme. Investments in Foreign debt instruments - up to 35% of the net assets of the Scheme. Investments in ADRs and GDRs issued by Companies in India / equity of listed overseas companies as permitted by SEBI regulations - upto 50% of the net assets of the scheme. Gross Exposure to Repo of Corporate Debt Securities - upto 10% of the net assets of the Scheme Investment Strategy Equity : The scheme will endeavor to invest in well managed sustainable businesses whose shares are available at reasonable value through a process of disciplined research. The portfolio will aim to provide part ownership to investors in some of the best run companies in India. The portfolio of securities will be well diversified across sectors, so identified, to mitigate overall risk. As the scheme is expected to be part of the core long term equity holdings of the investors, a well balanced and prudent style of fund management will be adopted to endeavor to deliver good returns at controlled levels of risk. The guiding principles while managing the portfolio are summarized below : 1) Stock prices are directly correlated to company profits over the medium to long term : Fund management would focus primarily on business fundamentals of the underlying company. The Equity Research process will endeavor to acquire a robust understanding of the dynamics of the underlying business. This would form the basis for forecasts on future profitability and sustainability of cash profit growth. Stock prices of companies that can sustain periods of high cash profit growth will outperform the markets over the long term. Investors entering this scheme are therefore expected to have at least a 2-3 years time horizon. 2

5 IDFC Classic Equity Fund (IDFC-CEF) (Contd.) (An open ended equity scheme) 2) Margin of Safety : The fund managers will look to build a margin of safety while making forecasts on business profitability. Margin of safety will also be the guiding principle while evaluating a company s current market price. The portfolio would also be protected from company specific risks by constantly monitoring the economic and business environment and changes in management strategy. 3) Acquire stocks at reasonable value : Once good businesses are identified, stocks would be endeavoured to be acquired when they are available at a reasonable value. Overall market corrections and stock price falls due to temporary factors that don t affect long-term profitability are an excellent opportunity to buy stocks cheap. 4) Stay fully invested over most periods : The Fund will not try to profit by predicting overall market direction based on technical indicators or momentum. The Fund will generally stay fully invested in equities to give investors the full advantage of a rise in the markets that is inevitable given the current trajectory India s GD growth. The scheme may however hold cash during periods where in the view of the fund manager the market valuations have run ahead of its fundamentals or when the fund manager is unable to identify stocks at a reasonable value. The scheme may also hold cash to meet anticipated redemptions or to tide over temporary adverse market developments. Debt : The domestic debt markets are maturing rapidly with liquidity emerging in various debt segments through the introduction of new instruments and investors. The actual percentage of investment in various fixed income securities will be decided after considering the prevailing political conditions, the economic environment (including interest rates and inflation), the performance of the corporate sector and general liquidity and other considerations in the economy and markets. The Fund has put in place detailed Investment Discretion Guidelines defining the prudential and concentration limits for the portfolio limits. The investment management team is allowed full discretion to make sale and purchase decisions within the limits established. Risk rofile of the Scheme Mutual Fund Units involve investment risks including the possible loss of principal. lease read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized on page no. 51 Risk Mitigation Factors lease Refer age No. 52 lans / Option lan Options & sub options available Regular/ Direct* Growth and Dividend (ayout, Reinvest & Sweep) Default option under the plan Default dividend option Growth Reinvestment *Direct lans: Direct lan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor No. of Folios and AUM (As on May 31, 2017) Folios ; AUM - Rs. 1, Cr. Applicable NAV lease Refer age No. 53 Minimum Application Fresh urchase (Including Switch-in) Amount/ Number of Units Rs and any amount thereafter Additional urchase (Including Switch-in) Repurchase (Including Switch-out) Rs and any amount thereafter Rs. 500 and any amount thereafter. If the balance in the folio / account available for redemption is less than the minimum amount prescribed above, the entire balance available for redemption will be redeemed. SI - Rs and in multiples of Re. 1 thereafter (minimum 6 installments); SW - Rs. 500 and in multiples of Re. 1 thereafter; ST (in) - Rs and any amount thereafter Despatch of Repurchase Within 10 working days of the receipt of the redemption request at the authorised centre of IDFC Mutual Fund. (Redemption) Request Benchmark Index S& BSE 200 Index Dividend olicy Under Dividend Option, dividend will be declared subject to availability of distributable surplus and at discretion of AMC / Trustee. The undistributed portion of the income will remain in the Option and be reflected in the NAV, on an ongoing basis. The Trustee s decision with regard to availability and adequacy, rate, timing and frequency of distribution of dividend shall be final. Name of the Fund Manager Anoop Bhaskar (managing the fund since April 30, 2016) Name of the Trustee Company IDFC AMC Trustee Company Limited erformance of the scheme Return (%) of Growth Option as at May 31, 2017 eriod Direct lan ear wise Absolute Returns Regular lan Returns S& BSE 200 Returns S& BSE ear ears ears Since Inception* *Date of Inception : Direct lan : 1-Jan-13 Regular lan : 9-Aug-05 Returns more than 1 year are calculated on compounded annualised basis Expenses of the Scheme F F F IDFC Classic Equity Fund - Dir - Growth F F IDFC Classic Equity Fund - Reg - Growth S& BSE 200 (i) Load Structure: Exit load: 1% if redeemed within 365 days from the date of allotment. (ii) Actual expenses for the previous financial year (inclusive of Service Tax and Additional TER, if any): Regular lan %; Direct lan %. Waiver of Load for Direct Applications ursuant to SEBI circular no. SEBI/IMD/CIR No.4/ / 09 dated June 30, 2009, there is no entry load for Mutual Fund schemes. Hence, the procedure for waiver of load for Direct Applications is no longer applicable. Tax treatment for the Investors (Unitholders) Investors are advised to refer to the details in the Statement of Additional Information (SAI) and also independently refer to their tax advisor. Daily Net Asset Value (NAV) ublication The NAV of the Fund will be calculated on all Business Days. The NAV will be published in 2 daily newspapers having on nationwide circulation and will also be updated on the AMFI website i.e. by 9.00.M. on all business days. The NAV can also be viewed on the website of the Mutual Fund i.e. For Investor Grievances lease Refer age No. 53 please contact Unitholders Information lease Refer age No. 54 ortfolio Turnover Ratio 1.68 [for the period June 1, ortfolio Turnover Ratio is calculated as lower of purchase or sale during the period / Average AUM for the last one year (includes 2016 to May 31, 2017] Fixed Income securities and Equity derivatives). 3

6 IDFC Classic Equity Fund (IDFC-CEF) (Contd.) Scheme s ortfolio holdings (An open ended equity scheme) Top 10 holdings of the Scheme as on May 31, 2017 is stated here below: Company Industry HDFC Bank Limited Banks ITC Limited Consumer Non Durables Larsen & Toubro Limited Construction roject ICICI Bank Limited Banks Reliance Industries Limited etroleum roducts Axis Bank Limited Banks Hero MotoCorp Limited Auto IndusInd Bank Limited Banks Bharat Forge Limited Industrial roducts Apollo Tyres Limited Auto Ancillaries (%) NAV Monthly portfolio statement of the Scheme is hosted on website Exposure of the Scheme across various sectors (% of NAV) : 28.1% 15.1% 10.7% 3.7% IDFC Equity Fund (IDFC-EF) Investment Objective Asset Allocation attern of the scheme Metals harma Construction Cement & Cement roducts Industrial Manufacturing IT Automobile Consumer Goods Energy Financial Services 1.8% 1.7% 1.1% 1.0% 0.4% 0.4% Textiles 4.1% Media & Entertainment 4.2% Chemicals 4.9% Fertilisers & esticides 5.6% Services 11.3% (An open ended equity scheme) The investment objective of the Scheme is to seek to generate capital growth from a portfolio of predominantly equity and equityrelated instruments (including equity derivatives). The scheme may also invest in debt and money market instruments to generate reasonable income. Asset Class Range of allocation (% of Net Assets) Risk rofile Equities & Equity related instruments High Debt & Money Market instruments 0-35 Low to Medium Securitised debt instruments 0-35 Low to Medium Investments in Derivatives - upto the limits permitted by SEBI Mutual Funds regulations from time to time. Investments in Securities Lending - upto 100% of Equity. investments in the Scheme. Investments in Foreign debt instruments - up to 35% of the net assets of the Scheme. Investments in ADRs and GDRs issued by Companies in India / equity of listed overseas companies as permitted by SEBI regulations upto 75% of the net assets of the scheme. Gross Exposure to Repo of Corporate Debt Securities upto 10% of the net assets of the Scheme Investment Strategy The Scheme seeks to generate capital appreciation from a portfolio predominantly equity and equity-related Instruments (including equity derivatives). The scheme may also invest in debt and money market instruments to generate reasonable income. The scheme will generate capital growth by predominantly investing in large cap stocks having a market capitalization equal to or above the 100th stock in the S& BSE 100 index. This will form at least 80% of the equity corpus of the scheme. The remaining portion of the scheme may be invested in stocks with smaller market capitalization and/or in debt and money market instruments depending on the prevailing market conditions. The scheme will follow an actively managed approach of identifying quality companies without any sector / industry bias. Within the investment universe, the focus of the scheme would be towards building a set of companies that have superior cash generating ability, capability to service debt and offer growth potential at reasonable price. Risk rofile of the Scheme Mutual Fund Units involve investment risks including the possible loss of principal. lease read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized on page no. 51 Risk Mitigation Factors lease Refer age No. 52 lans / Option lan Options & sub options available Default option under the plan Default dividend option Regular/ Direct* Growth and Dividend (ayout, Reinvest & Sweep) Growth Reinvestment *Direct lans: Direct lan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor 4

7 IDFC Equity Fund (IDFC-EF) (Contd.) No. of Folios and AUM (As on May 31, 2017) Applicable NAV Minimum Application Amount/ Number of Units Despatch of Repurchase (Redemption) Request Benchmark Index Dividend olicy Name of the Fund Manager Name of the Trustee Company erformance of the scheme (An open ended equity scheme) Folios ; AUM - Rs Cr. lease Refer age No. 53 Fresh urchase (Including Switch-in) Rs and any amount thereafter Additional urchase (Including Switch-in) Rs and any amount thereafter Repurchase (Including Switch-out) Rs. 500 and any amount thereafter If the balance in the folio / account available for redemption is less than the minimum amount prescribed above, the entire balance available for redemption will be redeemed. SI - Rs and in multiples of Re. 1 thereafter (minimum 6 installments) ; SW - Rs. 500 and in multiples of Re. 1 thereafter; ST (in) - Rs and any amount thereafter Within 10 working days of the receipt of the redemption request at the authorised centre of IDFC Mutual Fund. S& BSE 100 Under Dividend Option, dividend will be declared subject to availability of distributable surplus and at discretion of AMC / Trustee. The undistributed portion of the income will remain in the Option and be reflected in the NAV, on an ongoing basis. The Trustee s decision with regard to availability and adequacy, rate, timing and frequency of distribution of dividend shall be final. Sumit Agrawal & Arpit Kapoor (managing the fund since March 1, 2017) IDFC AMC Trustee Company Limited Return (%) of Growth Option as at May 31, 2017 ear wise Absolute Returns eriod Direct lan Regular lan Returns Nifty 50 Returns Nifty Index Index ear ears ears Since Inception* F F F F F *Date of Inception : Direct lan : 1-Jan-13 Regular lan : 9-Jun-06 IDFC Equity Fund - Dir - Growth IDFC Equity Fund - Reg - Growth Nifty 50 Index Returns more than 1 year are calculated on compounded annualised basis Expenses of the Scheme (i) Load Structure: Exit Load: 1% if redeemed within 365 days from the date of allotment (ii) Actual expenses for the previous financial year (inclusive of Service Tax and Additional TER, if any): Regular lan %; Direct lan %. Waiver of Load for Direct ursuant to SEBI circular no. SEBI/IMD/CIR No.4/ / 09 dated June 30, 2009, there is no entry load for Mutual Fund Applications schemes. Hence, the procedure for waiver of load for Direct Applications is no longer applicable. Tax treatment for the Investors are advised to refer to the details in the Statement of Additional Information (SAI) and also independently refer to Investors (Unitholders) their tax advisor. Daily Net Asset Value The NAV of the Fund will be calculated on all Business Days. The NAV will be published in 2 daily newspapers having (NAV) ublication nationwide circulation and will also be updated on the AMFI website i.e. by 9.00.M. on all business days. The NAV can also be viewed on the website of the Mutual Fund i.e. For Investor Grievances lease Refer age No. 53 please contact Unitholders Information lease Refer age No. 54 ortfolio Turnover Ratio 0.81 [for the period June 1, ortfolio Turnover Ratio is calculated as lower of purchase or sale during the period / Average AUM for the last one year (includes 2016 to May 31, 2017] Fixed Income securities and Equity derivatives). Scheme s ortfolio holdings Top 10 holdings of the Scheme as on May 31, 2017 is stated here below: Company Industry HDFC Bank Limited Banks ITC Limited Consumer Non Durables ICICI Bank Limited Banks Larsen & Toubro Limited Construction roject Reliance Industries Limited etroleum roducts Maruti Suzuki India Limited Auto Infosys Limited Software Housing Development Finance Corporation Limited Finance Avenue Supermarts Limited Retailing ower Grid Corporation of India Limited ower (%) NAV Monthly portfolio statement of the Scheme is hosted on website % 14.6% 14.4% 5 1.3% 1.0% 1.0% 0.9% Metals Services Industrial Manufacturing 3.1% harma 5.2% Cement & Cement roducts 5.4% Construction IT Automobile Consumer Goods Energy 5.8% Textiles 9.8% Financial Services Exposure of the Scheme across various sectors (% of NAV) :

8 IDFC Sterling Equity Fund (IDFC-SEF) (An open ended equity scheme) Investment Objective The investment objective of the Scheme is to seek to generate capital appreciation from a diversified portfolio of equity and equity related instruments. The Scheme will predominantly invest in small and midcap equity and equity related instruments. Small and Midcap equity and equity related instruments will be the stocks included in the Nifty free float Midcap 100 index or equity and equity related instruments of such companies which have a market capitalization lower than the highest components of Nifty free float Midcap 100 index. The Scheme may also invest in stocks other than mid cap stocks (i.e. in stocks, which have a market capitalisation of above the market capitalisation range of the defined small - midcap stocks) and derivatives. On defensive consideration, the Scheme may also invest in debt and money market instruments. In case of discontinuation / suspension of Nifty free float Midcap 100 index, the AMC reserves the right to modify the definition of Mid cap and Small cap companies. In case of such a modification, the interest of investors will be of paramount importance. Asset Allocation attern Asset Class Range of allocation (% of Net Assets) Risk rofile of the scheme Equities & Equity related instruments included in the Nifty free float High Midcap 100 Index or Equity and Equity related instruments of companies which have a market capitalization lower than the highest components of Nifty free float Midcap 100 Index, of which Small Cap Stocks shall be: Midcap Stocks shall be: Equity & Equity related instruments of companies which have a 0-35 High market capitalization higher than the highest component of Nifty free float Midcap 100 Index (i.e. in Equity and Equity related instruments of companies with market capitalization above the defined Small-Mid cap stocks) Debt and Money Market instruments (including Securitised Debt instruments) 0-35 Low to Medium Investments in Derivatives - upto the limits permitted by SEBI Mutual Funds regulations from time to time. Investments in Securities Lending - upto 100% of Equity investments in the scheme. Investments in Foreign debt instruments - up to 35% of the net assets of the Scheme. Investments in ADRs and GDRs issued by Companies in India / equity of listed overseas companies as permitted by SEBI regulations: upto 35% of the net assets of the scheme. Gross Exposure to Repo of Corporate Debt Securities upto 10% of the net assets of the Scheme. Investment Strategy The scheme will invest in well-managed growth companies that are available at reasonable value. Companies would be identified through a systematic process of forecasting earnings based on a understanding of the industry growth potential and interaction with company management to access the company's core competencies to achieve long-term sustainable profit growth. The scheme would predominantly create a portfolio of emerging business and companies that are aspiring leaders in their respective field of operations. Some part of the portfolio would be in stocks/ companies that do not have a significant history of being listed. The Scheme is expected to deliver returns for investors looking for a focused aggressive portfolio of fundamentally good businesses. The guiding principles while managing the portfolio are summarized below: 1) Sustainable company profits drives long term share value Fund management would focus primarily on business fundamentals of the underlying company. The Equity Research process will endeavor to acquire a robust understanding of the dynamics of the underlying business. This would form the basis for forecasts on future profitability and sustainability of cash profit growth. Stock prices of companies that can sustain periods of high cash profit growth, generally outperform the markets over the long term. Investors entering this scheme are therefore expected to have at least a one year time horizon. 2) Acquire stocks at reasonable value Once good businesses are identified, stocks would be endeavored to be acquired when they are available at a reasonable value. Overall market corrections and stock price falls due to temporary factors that don't affect long-term profitability are an excellent opportunity to buy stocks cheap. 3) Monitor market interest to ensure consistent performance Systematically tracking over stock ownership and over researched sectors would help to reduce the risk of a sudden sell off. Stock prices react to event triggers that are constantly monitored to ensure that portfolio performance is relatively more consistent. India in its growing phase, has witnessed a good hike in GD rate compared to other countries and this clearly depicts development of Indian industry. Thanks to sectoral development across the Indian industry, which have played a major role in the growth of the economy as a whole. Future growth sectors are generally well captured though Small and Mid Caps involved in those sectors. The present scenario reveals that though stocks pertaining to Large Cap, Mid Cap and Small caps have performed well, but returns of Small and Mid Cap stocks were relatively better than Large cap stocks during many phases. Even the Market data reveals that, some of the funds investing in Mid cap stocks have performed well during the last year i.e and in the current year. The entrepreneurial abilities of Indian businessmen and scalability of companies in India is now being recognized by Global Investors also. There are number of ublic offerings lined up in the Indian Equity market. The scheme may also invest in such companies to try and endeavor providing reasonable returns to the investors. It has also been observed that a number of Small cap / Mid cap Companies in past are now market leaders in their segments and are competing with the best of global firms. Small cap and Mid cap companies also provide good opportunities, as many times, there is lower awareness about such companies and their prices may be lower than the intrinsic value of the business (quoting at much lesser /E ratio). Institutional ownership also tends to be lower in these scrips as compared to large cap companies. These are also relatively less covered by research analyst, thus providing good investment opportunities. Debt The domestic debt markets are maturing rapidly with liquidity emerging in various debt segments through the introduction of new instruments and investors. The actual percentage of investment in various fixed income securities will be decided after considering the prevailing political conditions, the economic environment (including interest rates and inflation), the performance of the corporate sector and general liquidity and other considerations in the economy and markets. The Fund has put in place detailed Investment Discretion Guidelines defining the prudential and concentration limits for the portfolio limits. Risk rofile of the Scheme Mutual Fund Units involve investment risks including the possible loss of principal. lease read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors are summarized on page no. 51 Risk Mitigation Factors lease Refer age No. 52 lans / Option lan Options & sub options available Default option under the plan Default dividend option Regular/ Direct* Growth and Dividend (ayout, Reinvest & Sweep) Growth Reinvestment *Direct lans: Direct lan is only for investors who purchase /subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor No. of Folios and AUM Folios ; AUM - Rs. 1, Cr. (As on May 31, 2017) Applicable NAV lease Refer age No. 53 Minimum Application Fresh urchase (Including Switch-in) Additional urchase (Including Switch-in) Repurchase (Including Switch-out) Amount/ Number of Units Rs and any amount thereafter Rs and any amount thereafter Rs. 500 and any amount thereafter If the balance in the folio / account available for redemption is less than the minimum amount prescribed above, the entire balance available for redemption will be redeemed. SI - Rs and in multiples of Re. 1 thereafter (minimum 6 installments); SW - Rs and in multiples of Re. 1 thereafter; ST (in) - Rs and any amount thereafter Despatch of Repurchase Within 10 working days of the receipt of the redemption request at the authorised centre of IDFC Mutual Fund. (Redemption) Request Benchmark Index Nifty free float Midcap 100 index (earlier known as CNX Midcap Index) Dividend olicy Under Dividend Option, dividend will be declared subject to availability of distributable surplus and at discretion of AMC / Trustee. The undistributed portion of the income will remain in the Option and be reflected in the NAV, on an ongoing basis. The Trustee s decision with regard to availability and adequacy, rate, timing and frequency of distribution of dividend shall be final. Name of the Anoop Bhaskar (managing the fund since April 30, 2016) Fund Manager Daylynn into (managing the fund since October 20, 2016) 6

9 IDFC Sterling Equity Fund (IDFC-SEF) (Contd.) (An open ended equity scheme) Name of the Trustee Company erformance of the scheme IDFC AMC Trustee Company Limited Scheme s ortfolio holdings Top 10 holdings of the Scheme as on May 31, 2017 is stated here below: Company Industry Future Retail Limited Retailing The Ramco Cements Limited Cement IndusInd Bank Limited Banks Bajaj Finance Limited Finance KEC International Limited Construction roject Minda Industries Limited Auto Ancillaries Engineers India Limited Construction roject VRL Logistics Limited Transportation Voltas Limited Construction roject Crompton Greaves Consumer Electricals Limited Consumer Durables Return (%) of Growth Option as at May 31, 2017 ear wise Absolute Returns eriod Direct lan Regular lan Returns Nifty free float Returns Nifty free float Midcap 100 Index Midcap 100 Index ear ears ears Since Inception* F F F F F *Date of Inception : Direct lan : 1-Jan-13 Regular lan : 7-Mar-08 IDFC Sterling Equity Fund - Dir - Growth IDFC Sterling Equity Fund - Reg - Growth Nifty free float Midcap 100 Index Returns more than 1 year are calculated on compounded annualised basis Expenses of the Scheme (i) Load Structure: Exit Load: 1% if redeemed on or before 365 days from the date of allotment. (ii) Actual expenses for the previous financial year (inclusive of Service Tax and Additional TER, if any): Regular lan %; Direct lan %. Waiver of Load for Direct ursuant to SEBI circular no. SEBI/IMD/CIR No.4/ / 09 dated June 30, 2009, there is no entry load for Mutual Fund Applications schemes. Hence, the procedure for waiver of load for Direct Applications is no longer applicable. Tax treatment for the Investors are advised to refer to the details in the Statement of Additional Information (SAI) and also independently refer to Investors (Unitholders) their tax advisor. Daily Net Asset Value The NAV of the Fund will be calculated on all Business Days. The NAV will be published in 2 daily newspapers having (NAV) ublication nationwide circulation and will also be updated on the AMFI website i.e. by 9.00.M. on all business days. The NAV can also be viewed on the website of the Mutual Fund i.e. For Investor Grievances lease Refer age No. 53 please contact Unitholders Information lease Refer age No. 54 ortfolio Turnover Ratio 0.38 [for the period June 1, ortfolio Turnover Ratio is calculated as lower of purchase or sale during the period / Average AUM for the last one year (includes 2016 to May 31, 2017] Fixed Income securities and Equity derivatives). (%) NAV Monthly portfolio statement of the Scheme is hosted on website % 15.4% 7.1% 7.0% IDFC Focused Equity Fund (IDFC-FEF) (Earlier Known as IDFC Imperial Equity Fund) Investment Objective Metals 0.9% 0.9% Fertilisers & esticides Miscellaneous Chemicals 3.9% 3.2% 3.2% 1.8% 1.7% 1.0% Textiles Services Energy Cement & Cement roducts Industrial Manufacturing Automobile Construction Consumer Goods Financial Services 5.0% IT 8.5% harma 10.1% 9.6% Media & Entertainment Exposure of the Scheme across various sectors (% of NAV) : (An open ended equity scheme) The investment objective of the Scheme is to generate long term capital appreciation by investing in a concentrated portfolio of equity & equity related instruments of upto 30 companies. Asset Allocation attern Asset Class Range of allocation (% of Net Assets) Risk rofile of the scheme Equities & Equity related securities High Debt & Money Market instruments 0-35 Low to Medium Securitised debt instruments 0-35 Low to Medium Investments in Derivatives - upto the limits permitted by SEBI Mutual Funds regulations from time to time. Investments in Securities Lending - upto 100% of the equity investments of the Scheme. Investments in Foreign debt instruments - up to 35% of the net assets of the Scheme. Investments in ADRs and GDRs issued by Companies in India / equity of listed overseas companies as permitted by SEBI regulations - upto 50% of the net assets of the scheme. Gross Exposure to Repo of Corporate Debt Securities upto 10% of the net assets of the Scheme Investment Strategy The scheme seeks to generate capital appreciation by investing in a concentrated portfolio of upto 30 stocks. The portfolio will be actively managed and the fund manager will have the flexibility to invest across market cap and industries/sectors. Given that the scheme will be concentrated to a maximum of 30 stocks, the portfolio will look at investing in carefully researched Quality companies that have the ability to generate above average return on capital and superior growth prospects. 7